6. Share Repurchase In the previous problem, suppose the company has announced it is going to repurchase $22,800 worth of stock. What effect will this transaction have on the equity of the company? How many shares will be outstanding? What will the price per share be after the repurchase? Ignoring tax effects, show how the share repurchase is effectively the same as a cash dividend.

5. Regular Dividends The balance sheet for Fourth Corp. is shown here in market value terms. There are 12,000 shares of stock outstanding. Market Value Balance Sheet Cash Fixed assets Equity $503,000 $ 58,000 445,000 $503,000 Total Total $503,000 The company has declared a dividend of $1.90 per share. The stock goes ex dividend tomorrow. Ignoring any tax effects, what is the stock selling for today? What will it sell for tomorrow? What will the balance sheet look like after the dividends are paid? 6. Share Repurchase in the previous problem, suppose the company has announced it is going to repurchase $22.800 worthy of stock What effect will this transaction have on the Share be after the repurchase? Ignoring tax effects, show how the share repurchase is effectively the same as a cash dividend. Leat wahe halance sheet far mal